For a small open economy where the government is restricted to raise revenue using border taxes only, the optimal structure of border taxes is considered. As a matter of normalization exports and the supply to the market of the primary factor may be assumed to be untaxed, but that the household...

A two-sector general equilibrium model with imperfectly competitive labour markets is set up. Non-cooperative equilibria with wage setting at the sectoral level are shown to depend on the choice of price normalization rule even though all agents behave fully rationally. Hence, imposing...